Same-Day Delivery Darling Shutl Takes on Amazon’s Ground Game

Shutl CEO Tom Allason. Photo: Shutl

Imagine ordering something online, but instead of the store telling you when your package will arrive, you tell them. A few million U.S. residents will soon have that option as same-day delivery darling Shutl prepares for its stateside launch within about a month.

The U.K.-based company has already received a lot of love from startup watchers and investors, including UPS, which has put $2 million behind Shutl. Already widely available in its home country, the hotly contested race among the biggest online retailers to make same-day delivery workable has created a lot of anticipation around whether Shutl can deliver on its ambitious promises in the U.S.

Shutl partners with specific retailers, who offer two Shutl delivery options during online checkout. If you choose the first option, “now,” Shutl promises to get you your order within 90 minutes. The second option, “when,” lets buyers pick any one-hour delivery window they want—any day, any time, Shutl founder and CEO Tom Allason says.

The only catch: You have to live within 10 miles of the store you’re ordering from.

At a time when Amazon offers millions of products at next-day delivery speed, such a limitation might seem like a tough sell.

Because its inventory lives at massive distribution centers at a distance from big cities, Amazon can’t avail itself of the efficiencies afforded by urban density, Allason says. In other words, Amazon’s trucks have to drive farther, and they all have to start at the same place.

Shutl’s software platform, on the other hand, finds the nearest brick-and-mortar store to the buyer and the nearest courier to the store.

“Their idea of local distribution is at state level,” Allason says of Amazon. “Our idea of local distribution is at street level.”

To be clear, Shutl is not a trucking company. It doesn’t have its own fleet. It’s a software company (Allason says two-thirds of his employees are engineers) that plugs store ordering and inventory systems into one end of its platform and the extra capacity of existing courier companies into the other end. Retailers pay Shutl a fee for each delivery they coordinate. The cost of a Shutl delivery for the buyer is typically under $10.

Other same-day startups such as Postmates do something similar, though Postmates functions as a stand-alone app that offers to pick up and ferry any item from any store. Its closest cousin here is likely eBay Now, which also offers one-hour delivery from local branches of national chain stores, though eBay employs its own dedicated couriers.

Allason says Shutl cannot yet reveal which retailers his company is working with in the U.S. In the U.K., stores offering Shutl as an option include Argos, one of that country’s largest online retailers after Amazon. And in that country at least, Shutl appears to be taking off: Allason says Shutl now reaches about 75 percent of the British populace and handles about 30,000 orders every day.

In one way, reaching an audience of that scale in the U.S. shouldn’t be hard. The first 12 metro areas Shutl is targeting here have twice the population of all 60 cities Shutl serves in the U.K. combined. The first three Shutl plans to serve in its debut—New York, San Francisco and Chicago—are all large enough and dense enough to provide a serious testing ground for same-day.

But beating Amazon in this country’s wide-open spaces won’t likely happen, Allason acknowledges. The economics of same-day delivery break down when stores and customers are too spread out. For rural residents, getting something the same day will still mean what it has for decades now: Getting into the vehicle and going to Walmart.